New Delhi, Sept. 15: Lobbying by multinationals keen on 100 per cent FDI in mining and pressure from local mining majors determined to stop scarce mineral exports has forced the government to set up a high-powered committee to review the national mineral policy and recommend amendments to the Mines and Minerals Development and Regulation (MMDR) Act, 1957. Planning Commission member Anwarul Hoda will head the panel.

The Mittals and Posco want both iron ore and captive coal mining to be opened up to 100 per cent FDI. Back home, the Tatas and SAIL want exports of high-grade iron ore banned. Their contention has been that MNC steel mills and others are promising to set up plants here simply because they want to export some of the ore home.

Cheap exports of iron ore to Japan have long been a sore point with most steel-makers in India. Their point is that domestic steel industry is expanding and will need the ore.

Among the two most scarce resources now being sought after in the global commodities market are high-grade iron ore and low-ash coal needed to make steel. Only India and Brazil have ore with iron content of 60-65 per cent.

The Chinese, who along with the Australians are the largest quality coal producers, have reduced exports from about 10-12 million tonnes (mt) a year to just over 2 mt as they wish to conserve supplies for their steel industry.

“A contest over scarce raw materials is emerging. We can’t just go ahead and give away our strategic reserves of high-class ore even as others are doing the opposite,” say senior officials in the Planning Commission.

The commission has been pushing for a policy that encourages those who wish to import ore for steel-making units here. “The aim should be to encourage value-added exports. Let them convert ore into steel for their car plants or other purposes here itself,” officials said.

The Left, too, feels Indian companies should get priority on local resources. These parties argue that when the likes of Tatas and SAIL have big expansion plans, limited iron ore should be kept for them, not exported.